In this study, we employ three in vitro models of differentiation of pancreatic precursor cells - cells derived from human cadaveric pancreata, human islet-derived precursor cells (hIPCs) and CD73/CD90/CD105-positive mesenchymal stem cells (+++MSCs), and a human pancreatic cancer cell line (PANC-1 cells) - into hormone-producing cells of the islets of Langerhans so as to better understand regulation of differentiation of precursor cells into mature islet cells with a goal to develop a system that could be used for cell replacement therapy for patients with diabetes mellitus. We hypothesize that epigenetic marks (or chromatin modifications) of genes important in the function of differentiated islet cells are present in the islet precursor cells. Regulation of gene expression by epigenetic marks is being found to be important in other types of stem cells including embryonic stem cells. We find that epigenetic marks associated with active genes in other systems are present on chromatin of the insulin gene in adult human islets, hIPCs and PANC-1 cells even though hIPCs and PANC-1 cells do not express insulin under usual growth conditions. In contrast, epigenetic marks found on repressed genes are found at low levels on the insulin gene in adult islets, hIPCs and PANC-1 cells. In preliminary experiments, we found similar chromatin modifications on the insulin gene of +++MSCs also. We are characterizing these chromatin modifications further. We are also delineating epigenetic changes, including chromatin modifications and DNA methylation, on other genes within these cells. An important aspect of this work is to determine whether all or most of the genes expressed in differentiated beta cells are marked, and whether these marks can be retained with long-term cell proliferation in culture or whether these marks are changed as part of a process of gene silencing during long-term culture. We have begun to study the epigenetic modifications of the gene for the master regulator transcription factor pancreatic and duodenal homeobox 1 (PDX1) and find that it is modified differently than the insulin gene. We are also employing inhibitors of histone deacetylase enzymes, which repress gene transcription by reversing activatory histone modifications, and inhibitors of DNA methylases, which directly appear to inhibit transcription.